Suffering from lending money to acquaintances

Lending 10 million VND to a former colleague, but for 5 years, Ms. Thanh Hang called, texted and went to his house to collect it but was not received, and was even scolded as "rich but evil".

Since then, Ms. Thanh Hang (34 years old, living in My Dinh, Hanoi ) has lost the money she lent and a friend. "It is true as people say, 'stand to lend, kneel to collect debt'", she said.

In 2010, just after receiving her salary of more than 15 million VND, Ms. Hang received a call from her closest friend at her old company, her voice panicked, saying that her father had to go to the emergency room and needed money to pay the hospital bill. This person borrowed 10 million VND, promising to pay it back at the end of the month. The loan was 2/3 of her salary while her child was also sick, but out of pity for her friend, Ms. Hang gave him the money right away.

After one month, two months, there was still no sign of the borrower paying the debt. In the third month, Thanh Hang called to collect the debt, but her friend said he still didn't have the money. When she arrived at work, she found out that her best friend was in debt to most of her colleagues. "Everyone texted and called her but couldn't get through, so they asked me to collect the debt for them because they knew we used to be very close," Thanh Hang said.

Every time her child was sick and had to go to the hospital or something unexpected happened, she always thought about that debt, but despite "texting and explaining all kinds of situations" to demand the debt, the money still did not come.

One time, wanting to settle the matter, Ms. Thanh Hang went straight to her friend's boarding house to collect the debt. At first, this person explained the reason. When the creditor insisted on giving a specific answer on when he could pay, the friend blamed her for being "rich but cruel, collecting debt when people are in trouble".

The neighbors heard the noise and told Hang that it was not her father who was sick, but her friend's husband who lost money in gambling, which forced his wife and children into a situation where they could not pay back the loan.

Suffering from lending money to acquaintances

Illustration: PN

Lending money to relatives, by the time the debt was recovered, Trung Anh's "savings fund" in Cam Thuy, Thanh Hoa had almost all fallen.

Four years ago, he lent his cousin 100 million VND to build a house, with the agreement to pay it back at the end of the year. But his cousin delayed the payment, saying that business was difficult and she could not pay on time. Many times when Trung Anh wanted to renovate the house they were living in, his wife went to her cousin’s house to ask for repayment, but she was refused. “My wife and children live in a dilapidated house, but they give money to someone to build a high-rise building,” his wife often complained.

What made him and his wife upset was that his cousin's family was not as poor as they had described. They still occasionally bought furniture, bought a scooter, ate well and dressed well every day. It was not until Trung Anh became tense, demanding that if they did not pay the debt, they would have to pay interest, that his cousin began to pay back the money in installments, sometimes 3 million, sometimes 5 million.

More than two years later, Trung Anh got the full 100 million VND, but spent most of it. “After the debt was paid off, we didn’t even bother to say hello when we met,” Trung Anh said.

In Vietnam, there has been no survey on the problems of lending money to relatives and acquaintances, but financial expert Phan Dung Khanh ( Ho Chi Minh City) said that this situation is very common. "The Vietnamese people are easy-going and respectful, so they often help relatives and acquaintances by lending money, but without paperwork or procedures, leading to difficulty in collecting money if the borrower is slow to repay," said Mr. Khanh.

According to a 2022 CreditCards.com survey, 59% said lending money to a family member or friend was a negative experience. About 42% lost money because of a loan they couldn’t get back, 26% said their relationship with the borrower was negatively affected, and 9% said they got into a physical fight over it.

In a survey by the US financial firm Lendingtree, more than one-third of borrowers and lenders said the emotions they felt after each loan or borrowing experience were negative, including resentment and hurt feelings.

Lawyer Nguyen Hong Thai (Hanoi Bar Association) said that since the beginning of the year, he has provided legal advice to nearly 100 cases of lending money to relatives and acquaintances that cannot be collected. “Not only do they lose money, time and create trouble, many families also fall into conflict just because they lend large sums of money without discussing or informing their spouses,” said Mr. Hong Thai.

Thu Nga (32 years old, in Ha Nam) and her husband almost filed a lawsuit because of a conflict when lending money to relatives. Duc Tu, Nga's husband, transfers all the money he earns to his wife for savings. Two years ago, the older sister failed in business due to the pandemic, so she asked to borrow money from her younger sister. Nga lent her 200 million VND without discussing it with her husband. "She promised to pay back by the end of the year, so I didn't think anything of it. When I asked, she said 'the end of the year is the end of the year after that'", she said.

Last year, Duc Tu wanted to open his own business, so he asked his wife to give him his savings. Unable to get the debt back, Nga secretly borrowed money everywhere to give to her husband, afraid that he would blame her for not being honest. Unexpectedly, the people who lent money to Nga were all relatives, and they turned around and asked Tu why. Seeing that some of the couple borrowed money, some did not know anything, and acquaintances did not dare to transfer money to Nga anymore.

Frustrated by the interruption of the investment progress and his wife's dishonesty, Mr. Tu showed resentment: "I don't know what else you are doing secretly for your parents." The conflict between the couple continued to escalate. Seeing her sister's happiness at risk of breaking down, the older sister still had no intention of paying off the debt because she didn't know where to get the money.

Lawyer Nguyen Hong Thai advises that for those who have not been able to collect debt, collect as much evidence as possible to prove that they have lent money, and seek legal intervention when possible.

Sharing the same opinion, financial expert Phan Dung Khanh suggested that for large amounts of money that affect life, evidence must be collected to find a way to get it back. If the amount is small, the borrower should be classified as a bad debt, not told, but accepted that the money may not be recovered.

“You should never lend money to that person again,” he said. Experts also advise reconsidering relationships with borrowers who do not repay, because those who are helped to lend but break their promises are often not honest people.

According to Mr. Phan Dung Khanh, in any case, you should not lend money to anyone without holding something as collateral such as property or a notarized loan document. "With people who are too close but have low reputation and find it difficult to refuse, it is better to lend a small amount of money than to lend a large amount," he said.

In case of wanting to help others, lenders should take actions similar to banks such as assessing the ability to repay and preparing full legal procedures when lending, avoiding the type of oral lending that causes loss of both money and feelings.

"Tell the story of a debt default as an excuse to sign a loan. This way, it will have less emotional impact and the borrower will understand that if they want to take the money, they must fulfill their obligations," said Mr. Khanh.

“As close friends, we need to be clear and transparent with each other. Be clear about money and decisive about love,” the expert noted.

Although she has to swallow the bitter pill of losing money and getting a bad reputation, when a close acquaintance borrows money, if any, Thanh Hang is still willing to help. “I always think that people are in need of money to borrow. Of course, I am more selective and considerate,” she said. Up to now, apart from her former colleague, she has never been cheated of her debt again.

*Character names have been changed.

According to VNE

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